S&P cuts GrafTech, notes to CCC+

Standard & Poor's said it lowered its corporate credit rating on GrafTech International Ltd. two notches to CCC+ from B.

The outlook is negative.

At the same time, the agency lowered the issue-level rating on the company's $300 million senior unsecured notes two notches to CCC+ from B, in line with the corporate credit rating. The recovery rating remains 4, indicating an expectation for average (30% to 50%; at the upper end of the range) recovery in the event of a payment default.

"The negative outlook reflects the uncertainty surrounding GrafTech's covenants and very weak credit metrics amplified by continued overcapacity in the global steel market and persistently weak graphite electrode prices," S&P credit analyst Michael Maggi said in a news release.

"We expect adjusted debt to EBITDA to remain well above 12x and adjusted EBITDA interest cash coverage notably below 1x for at least the next 12 months."

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